MACRA Playbook Implementing Value-Based Payment and Improving Care in a New Environment Elizabeth Mitchell, President & CEO Network for Regional Healthcare Improvement September 1, 2016

We have a problem. Health Spending as a Share of GDP United States, 1962 to 2022 file:///.file/id=6571367.45249208

“Deductible rates 67% in last 5 years …” “Even people who are insured are having problems paying medical bills.” – Larry Levitt, Kaiser Foundation “Deductible rates 67% in last 5 years …” “Patient cost-sharing 77% 2004-2014, driven by a 256% jump in deductible payments…” Source: Kaiser Family Foundation

Percent change in middle-income households’ spending on Percent change in middle-income households’ spending on basic needs (2007-2014) Source: Brookings Institution, Wall Street Journal

If food prices had risen at medical inflation rates since the 1930s. 2009 1 dozen eggs $85.08 1 pound apples $12.97 1 pound sugar $14.53 1 roll toilet paper $25.67 1 dozen oranges $114.47 1 pound butter $108.29 1 pound bananas $17.02 1 pound bacon $129.94 1 pound beef shoulder $46.22 1 pound coffee $68.08 10 Item Total $622.27 Source: American Institute for Preventive medicine

We know the reason(s). Lack of Access Wrong Incentives Medical Error Rates Poor Health Outcomes Fragmented Delivery System Lack of Transparency

We have a force for change… Payment Reform Taxonomy 3 Alternate Payment Models Built on Fee for Service 4 Population-Based Payment 1 Fee for Service No link to quality 2 Fee for Service Link to quality

The move to value payment

MACRA is part of a broader push towards value and quality. In January 2015, the Department of Health and Human Services announced new goals for value-based payments and APMs in Medicare

Over time, the desire is to influence a shift in payment models to Categories 3 and 4 Conceptual diagram of the desired shift in payment model application given the current state of the commercial market* Note: Size of “bubble” indicates overall investment in each category of APM Over time, APMs will move up the Y-axis and there will be more investment in the higher categories *Source: CPR 2014 National Scorecard on Payment Reform, based on the National commercial market using 2013 data.

From FFS to PBP: Some Changes Required New measures – quality and cost New shared data infrastructure New incentives Transparency Alignment across payers New care models New community partners New relationships

Dr. Steele: The Way YOU Pay is a Major Part of the Problem! LOSE ?? $$ $$$ Population Health for 20,000 People Primary Care Psych Clinic, Home Health, EMS, Nursing Home, Etc. Inpatient Beds Lab and Other Ancillaries Imaging Surgical and other Procedures Total Joints Rests on the head… of a pin. September 18, 2018

Errors & Complications You Get What You Pay For Employers Want: Informed Employees Improved Outcomes Care Coordination Prevention Functional Status Return to Work Employers Pay For: Tests Visits Procedures Prescriptions Errors & Complications

Payment Reforms should Support Care Changes It’s not about “risk” or “incentives,” it’s about giving healthcare providers the ability/flexibility to improve outcomes and reduce costs in a way that is financially feasible Desired changes in care should drive payment reforms that support them, not the other way around Principal Tools: Episode-of-Care Payment Risk-Adjusted Global Payment

MIPS Performance categories 2019 2020 2021+ Quality Resource Use Clinical Practice Improvement Activities Advancing Care Information

Participants must collectively meet the participation threshold

Success will Require Multi-payer Solutions Common incentives Common measures Shared data All payer measurement Quality Outcomes Total Cost of Care

Payers Need to Align to Allow Focus on Better Care Even if every payer’s system is better than it was, if they’re all different, providers will spend too much time and money on administration rather than care improvement Payer Payer Payer Better Payment System B Better Payment System A Better Payment System C Provider Patient Patient Patient

Who Aligns on Behalf of the Community? Patient Education & Engagement Quality/Cost Analysis & Reporting Value-Driven Payment Systems & Benefit Designs Value-Driven Delivery Systems

The Role of Regional Health Improvement Collaboratives Patient Education & Engagement Regional Health Improvement Collaborative Quality/Cost Analysis & Reporting Value-Driven Payment Systems & Benefit Designs Value-Driven Delivery Systems

Alone: Providers: - Can change care but not payment - Don’t control patient incentives for utilization - Don’t have needed data Employers: - Can change payment but not care - Don’t make care decisions Plans: - Only influence a portion of providers’ patients - Don’t have multipayer population data Patients: - Have limited information or influence State Governments: - Limited time horizon - Political environment and regulatory role 9/18/2018

A Regional Example… Recommended cost reduction strategy and stakeholder roles: Priority 1: Reduce Hospital Admissions for People with Chronic Illnesses Findings: People with chronic illness are hospitalized at a rate 3.2x that of the normal population. 20-40% of these admissions are preventable if best practice standards are met. Savings Opportunity: If all areas of the state reduced admissions for people with chronic illness by 20%, resulting savings for MHMC members would be $32m. This translates to an average of 3.2% PMPM savings for employers/plan sponsors. Barriers to be Addressed: Lack of transparency of performance variation; lack of timely utilization data to providers to manage populations; lack of adequate QI support; inadequate reimbursement for primary and community based care- particularly practice based care management; lack of patient engagement; inadequate chronic disease self-management programs

A Regional Example… Priority 1: Reduce Hospital Admissions for People with Chronic Illnesses Changes Required: Providers: Improve care transitions; develop PCMH and CCTs; use data to analyze admissions Plans: Change reimbursement to reward primary and community based care including practice-based care management; enhance Rx coverage for patients with chronic illnesses; reduce cost sharing for preventive care; share data Patients: Participate in care management and partner with providers Purchasers: Benefit incentives for participation in care management; Education and wellness activities for employees with chronic conditions Others: Public health initiatives to reduce chronic illness Implications of Reductions: Fewer hospital admissions will require hospitals to reduce staff/infrastructure with community wide economic impact.

Sustainable Reforms Will Require Stakeholder Buy-In Actionable data Technical assistance Financial incentives Meaningful measurement Elizabeth

MACRA is a policy framework. You will define community success. What are the key plays to advance high value care: Employers: Providers: Plans: Patients: Partners: 9/18/2018

NRHI Membership Aligning Forces for Quality – Southcentral Pennsylvania Better Health Partnership California Quality Collaborative Center for Improving Value in Healthcare Community First, Inc. Finger Lakes Health Systems Agency Great Detroit Area Health Council Health Insight - Nevada Health Insight - New Mexico Health Insight – Utah Healthcare Collaborative of Greater Columbus Institute for Clinical Systems Improvement Integrated Healthcare Association Iowa Healthcare Collaborative Kansas City Quality Improvement Collaborative Kentuckiana Health Collaborative Louisiana Health Care Quality Forum Maine Health Management Coalition Maine Quality Counts Massachusetts Health Quality Partners Michigan Center for Clinical Systems Improvement Midwest Health Initiative Minnesota Community Measurement Mountain-Pacific Quality Health Foundation MyHealth Access Network New Jersey Health Care Quality Institute North Coast Health Information Network Oregon Health Care Quality Corporation Pacific Business Group on Health Pittsburgh Regional Health Initiative The Health Care Improvement Foundation The Health Collaborative Washington Health Alliance Wisconsin Collaborative for Healthcare Quality Wisconsin Health Information Organization

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